Net Neutrality

“Is it genuinely liberal to allow competition on the basis of existing service providers offering different packages based on traffic management which favours one company over another? Or is it, instead, better to provide what is often called a level playing field – where traffic flows at the same speed, whatever the content and whoever owns and operates the website?”

Before answering this, it is worth examining what net neutrality means. Stealing from Wikipedia, net neutrality “is the principle that all Internet traffic should be treated equally.” Users must also be allowed to access any content, anywhere, from any device without restrictions by either government or ISPs.

From a liberal point of view, it is clear there should be no censorship by governments (or anyone else). It is also clear that ISPs should not be allowed to block accessing to their competitors content.

So, as far as openness of access goes, it is clear there must be a level playing field, with no restrictions on access to content (except, of course, those related to payment, copyright, age, etc).

The difficulties arise with traffic management. ISPs have a fixed bandwidth pipe from the internet backbone and face a difficult task balancing competing requests for this bandwidth. For example:

ensuring swift response when loading pages;

maintaining quality-of-service for streamed services (e.g. video);

allocating bandwidth to large file transfers;

and ensuring fair distribution of bandwidth between users.

As a consequence, they must employ traffic management and cannot merely forward each request as it arrives.

But this traffic management also enables new business practices that may either enable or stifle competition. Some examples:

A company in a dominant position might pay ISPs to provide a better quality-of-service for their video-streaming than their competitors enjoy. This performance difference could make it extremely hard for a competitor to break into their market, however good the content. Conversely, if a new entrant pays the ISP, this performance difference might allow them to gain traction against a dominant competitor.

An ISP could also provide differently priced options to users with different quality-of-service levels, for example a basic package may make no guarantees on video services whereas a premium package may guarantee full 1080p streamed video even in peak times. Or an ISP may just drop the bandwidth available for streamed services during peak times.

A network provider might stifle competition by giving priority to subscribers using the provider’s own ISP over subscribers using another ISP.

The difficulty is to decide which business practices are okay and which are not. In principle, practices that may deliver:

Different performance to users based on traffic type (e.g. web pages, streamed video, file transfer) promote competition between ISPs and should be allowed

Different performance to users based on traffic source (e.g. YouTube, Disney, Google) generally stifle competition, giving an advantage to incumbents, and should not be allowed

If these principles are applied, then content providers must compete through the quality of their content, not by artificially manipulated the perceived user performance.